ex4-4.htm


     

    Exhibit
4.4

     

    Execution
Copy

    
 

    This SUBORDINATION AGREEMENT
(this “Agreement”),
dated as of June 30, 2008 is among MRU Holdings, Inc., a Delaware
corporation (the “Company”), Battery Ventures
VII, L.P., a Delaware limited partnership (“BV7”), Battery Investment
Partners VII, LLC, a Delaware limited liability company (“BIP7” and together with BV7,
collectively, the “Subordinated
Creditors,” and
individually, each, a “Subordinated Creditor”), the
Buyers (as defined in the Purchase Agreement described below), and Viking Asset
Management, LLC, a California limited liability company, in its capacity as
collateral agent for itself and for the Buyers (including any successor agent,
hereinafter, the “Collateral
Agent”).

     

    R
E C I T A L S

     

    A.           Company
has executed and delivered to the Buyers those certain secured senior notes
dated as of October 19, 2007 (as any of the same may be amended, supplemented,
restated or modified and in effect from time to time, collectively, the “Note”).  The Note
was issued pursuant to that certain Securities Purchase Agreement dated as of
October 19, 2007 (as the same has been and hereafter may be amended, modified,
supplemented or restated, the “Purchase Agreement”) by and
among the Company and Buyers, and pursuant to which the Buyers have made certain
loans (“Loans”) to
Company.

     

    B.           Each
of Embark Corp., a Delaware corporation, Embark Online, Inc., a Delaware
corporation, Goto College Holdings Inc., a Delaware corporation, iempower, Inc.,
a Delaware corporation, MRU Originations, Inc., a Delaware corporation and MRU
Universal Guaranty Agency, Inc., each such entity, together with each other
person or entity who becomes a party to the Guaranty (as defined herein) by
execution of a joinder in the form of Exhibit A attached
thereto, is referred to individually as a “Viking Guarantor,” and collectively as the
“Viking Guarantors”)
have executed a Guaranty dated as of October 19, 2007 (as the same may be
amended, supplemented, restated or modified and in effect from time to time, the
“Guaranty”) in favor of
the Collateral Agent in respect of Company’s obligations under the Purchase
Agreement and the Note.

     

    C.           The
Company has issued to each Subordinated Creditor shares of the Company’s Series
B-2 Convertible Preferred Stock, par value $0.001 per share (the “Series B-2 Stock”), with the
relative rights and preferences set forth in the Certificate of Designation
attached hereto as Exhibit A (the “COD”) with an original issue
price of $2.25, and pursuant to which the Company has agreed that (i) the Series
B-2 Stock together with the accrued but unpaid dividends thereon shall convert
automatically into the same class of equity securities as shall be issued and
sold by the Company to new investors in the first sale of equity securities (the
“Equity Securities”)
that shall take place after the date of issuance of the Series B-2 Stock in
which the proceeds to the Company from the sale will equal or exceed $75,000,000
(inclusive of the consideration received for the Series B-2 Stock) and in which
a single investor or a group of related investors provides 60% of the total
proceeds (the “Automatic
Conversion”); or (ii) in the event the Automatic Conversion does not
occur on or before September 30, 2008, each Subordinated Creditor may elect to
convert the Series B-2 Stock and accrued but unpaid dividends thereon into
common stock of the Company (the “Optional Conversion”), in each
case in accordance with the terms of such Series B-2 Stock and the
COD.  In addition, in connection with the Series B-2 Stock, the
Company has issued to the Subordinated Creditors five

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    year
warrants to purchase in the aggregate 659,132 shares of common stock of the
Company at a per share exercise price of $2.25 (collectively, the “Warrants” and individually,
each, a “Warrant”) in
exchange for $0.125 per each share of common stock that can be purchased with
Warrants.

     

    NOW,
THEREFORE, in reliance upon this Agreement, and as required by the terms of the
Purchase Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which hereby are acknowledged, the parties hereto hereby
agree as follows:

     

    
      1.          
 Definitions.  All
capitalized terms used but not elsewhere defined in this Agreement shall have
the respective meanings ascribed to such terms in the Purchase Agreement and the
Note. The following terms shall have the following meanings in this
Agreement:

    

     

    Buyers shall mean holders of
Senior Indebtedness including, without limitation, any holder of any Senior
Indebtedness after the consummation of any Permitted Refinancing.

     

    Enforcement
Action is defined in subsection 2.7.

     

    Loan
Documents means the collective reference to the Purchase Agreement
and  the Note, the Security Agreement, the Guaranty and each of the
other agreements to which the Company or any Viking Guarantor is a party or is
bound in connection with the transactions contemplated under the Purchase
Agreement and the Note.

     

    Paid in
Full or Payment
in Full shall mean the indefeasible payment in full in cash of all Senior
Indebtedness and termination of all commitments to lend under the Loan Documents
and Permitted Refinancing Loan Documents.

    


    Permitted
Refinancing means any refinancing of the Senior
Indebtedness.

     

    Permitted
Refinancing Loan Documents means any and all agreements, documents and
instruments executed in connection with a Permitted Refinancing of Senior
Indebtedness.

     

    Proceeding
is defined in subsection 2.3.

     

    Senior
Indebtedness shall mean the obligations, liabilities and other amounts
owed under the Purchase Agreement, the Note or any other Loan Document including
all interest, fees, expenses, indemnities and enforcements costs, whether before
or after the commencement of a Proceeding and without regard to whether or not
an allowed claim, and all obligations and liabilities incurred with respect to
Permitted Refinancings, together with any amendments, restatements,
modifications, renewals or extensions of any thereof.

     

    Subordinated
Creditors shall mean the “Subordinated Creditors” which are each a
signatory to this Agreement and any other holders of the Series B-2 Stock or any
other Subordinated Indebtedness from time to time as permitted
hereunder.

     


    
      
         


      

      
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    Subordinated
Default shall mean a default in the payment of the Subordinated
Indebtedness, or performance of any term, covenant or condition contained in the
Subordinated Indebtedness Documents or the occurrence of any event or condition,
which default, event or condition permits any Subordinated Creditor to
accelerate or demand payment of all or any portion of the Subordinated
Indebtedness.

     

    Subordinated
Default Notice shall mean a written notice to Collateral Agent pursuant
to which Collateral Agent is notified of the existence of a Subordinated
Default, which notice incorporates a reasonably detailed description of such
Subordinated  Default.

     

    Subordinated
Indebtedness shall mean all of the obligations of the Company to the
Subordinated Creditors evidenced by the Series B-2 Stock, the COD and all other
amounts now or hereafter owed by the Company to the Subordinated Creditors
pursuant to the Subordinated Indebtedness Documents.

     

    Subordinated
Indebtedness Documents shall mean each of the Series B-2 Stock, the COD
and all other documents and instruments evidencing or pertaining to any portion
of the Subordinated Indebtedness, as amended, supplemented, restated or
otherwise modified from time to time as permitted hereunder.

     

    2.          
 Subordination of
Subordinated Indebtedness to Senior Indebtedness.

     

    2.1           Subordination.  The
payment of any and all of the Subordinated Indebtedness hereby expressly is
subordinated, to the extent and in the manner set forth herein, to the Payment
in Full of the Senior Indebtedness.  Each holder of Senior
Indebtedness, whether now outstanding or hereafter arising, shall be deemed to
have acquired Senior Indebtedness in reliance upon the provisions contained
herein.

     

    2.2           Restriction
on Payments.  Notwithstanding any provision of the Subordinated
Indebtedness Documents to the contrary and in addition to any other limitations
set forth herein or therein, no payment (whether made in cash, securities
(except as set forth in the following sentence) or other property or by set-off)
of dividends or the redemption value of the Series B-2 Stock, whether upon a
default or otherwise, or any other amount due with respect to the Subordinated
Indebtedness shall be made or received, and no Subordinated Creditor shall
exercise any right of set-off or recoupment with respect to any Subordinated
Indebtedness, until all of the Senior Indebtedness is Paid in
Full.  Notwithstanding anything to the contrary contained in the
preceding sentence or in the Loan Documents, the issuance of equity securities
of the Company to the Subordinated Creditors upon the Automatic Conversion or
the Optional Conversion, including, without limitation, the issuance of equity
securities to pay accrued but unpaid dividends on the Series B-2 Stock upon such
Automatic Conversion or Optional Conversion, in accordance with the terms of the
Series B-2 Stock and COD, as each are in effect on the date hereof, and the
issuance of shares of the Company’s common stock upon exercise of the Warrants
shall not be deemed a violation of (i) this Subordination Agreement or (ii) the
Loan Documents.

     


    
      
         


      

      
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    2.3           Proceedings.  In
the event of any insolvency, bankruptcy, receivership, custodianship,
liquidation, reorganization, assignment for the benefit of creditors or other
proceeding for the liquidation, dissolution or other winding up of the Company
or any of the Viking Guarantors or any of their respective properties (a “Proceeding”):

     

    (i)           the
Buyers shall be entitled to receive payment in full in cash of the Senior
Indebtedness before any Subordinated Creditor is entitled to receive any
payment, including, without limitation, the payment of cash dividends or the
payment of the redemption value, upon the Subordinated Indebtedness, and Buyers
shall be entitled to receive for application in payment such Senior Indebtedness
any payment or distribution of any kind or character, whether in cash, property
or securities (other than as permitted by the last sentence of Section 2.2
hereof) or by set-off or otherwise, which may be payable or deliverable in any
such Proceedings in respect of the Subordinated Indebtedness;

     

    (ii)           any
payment or distribution of assets of the Company or any Viking Guarantor of any
kind or character, whether in cash, property or securities (other than as
permitted by the last sentence of Section 2.2 hereof), by set-off or otherwise,
to which any Subordinated Creditor would be entitled pursuant to the
Subordinated Indebtedness but for the provisions hereof shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the Collateral Agent for the benefit of Buyers until
the Senior Indebtedness shall have been Paid in Full, and each Subordinated
Creditor acknowledges and agrees that such payment or distribution may,
particularly with respect to interest on Senior Indebtedness after the
commencement of a Proceeding, result in such Subordinated Creditor receiving
less than it would otherwise receive;

     

    (iii)           each
Subordinated Creditor hereby irrevocably (x) authorizes, empowers and directs
all receivers, trustees, debtors in possession, liquidators, custodians,
conservators and others having authority in the premises to effect all such
payments and deliveries, and such Subordinated Creditor also irrevocably
authorizes, empowers and directs, the Collateral Agent until the Senior
Indebtedness shall have been Paid in Full, to demand, sue for, collect and
receive every such payment or distribution, and (y) agrees to execute and
deliver to the Collateral Agent and the Buyers all such further instruments
confirming the authorization referred to in the foregoing clause (x);
and

     

    (iv)           each
Subordinated Creditor hereby irrevocably authorizes, empowers and appoints
Collateral Agent (until the Senior Indebtedness shall have been Paid in Full) as
its agent and attorney in fact to (x) execute, verify, deliver and file such
proofs of claim upon the failure of such Subordinated Creditor promptly to do so
(and in any event prior to

     


    
      
         


      

      
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    thirty
(30) days before the expiration of the time to file any proof) and (y) vote such
claims in any such Proceeding; provided that no holder of Senior Indebtedness
shall have any obligation to execute, verify, deliver and/or file any such proof
of claim or vote such claim.  In the event the Collateral Agent or any
Buyer (or any agent, designee or nominee thereof) votes any claim in accordance
with the authority granted hereby, the Subordinated Creditor shall not be
entitled to change or withdraw such vote.

     

    The
Senior Indebtedness shall continue to be treated as Senior Indebtedness and the
provisions hereof shall continue to govern the relative rights and priorities of
Buyers and the Subordinated Creditors even if all or part of the Senior
Indebtedness or the security interests securing the Senior Indebtedness are
subordinated, set aside, avoided or disallowed in connection with any such
Proceeding and the provisions hereof shall be reinstated if at any time any
payment of any of the Senior Indebtedness is rescinded or must otherwise be
returned by Collateral Agent, any Buyer or any agent, designee or nominee of
such holder.

     

    2.4           Incorrect
Payments.  If any payment (whether made in cash, securities or
other property) not permitted under this Agreement is received by any
Subordinated Creditor on account of the Subordinated Indebtedness before all
Senior Indebtedness is Paid in Full, such payment shall not be commingled with
any asset of such Subordinated Creditor, shall be held in trust by such
Subordinated Creditor for the benefit of the Buyers and shall promptly be paid
over to the Collateral Agent or its designated representative, for application
(in accordance with the Purchase Agreement, the Note or the Permitted
Refinancing Loan Documents) to the payment of the Senior Indebtedness then
remaining unpaid, until all of the Senior Indebtedness is Paid in
Full.

     

    2.5           Sale,
Transfer.  Other than upon the Automatic Conversion or Optional
Conversion of the Series B-2 Stock as provided in Section C of the Recitals to
this Agreement, no Subordinated Creditor shall sell, assign, dispose of or
otherwise transfer all or any portion of the Subordinated Indebtedness (a)
without giving prior written notice of such action to Collateral Agent, (b)
unless prior to the consummation of any such action, the transferee thereof
shall execute and deliver to Collateral Agent a joinder to this Agreement, or an
agreement substantially identical to this Agreement and acceptable to the
Collateral Agent, in either case providing for the continued subordination and
forbearance of the Subordinated Indebtedness to the Senior Indebtedness as
provided herein and for the continued effectiveness of all of the rights of
Collateral Agent and Buyers arising under this Agreement and (c) unless
following such sale, assignment, pledge, disposition or other transfer, there
shall either be (i) no more than two holders of Subordinated Indebtedness or
(ii) one Person acting as agent for all holders of the Subordinated Indebtedness
pursuant to documentation reasonably satisfactory to Collateral Agent such that
any notices and communications to be delivered to Subordinated Creditors
hereunder and any consents required by Subordinated Creditors shall be made to
or obtained from such agent and shall be binding on each Subordinated Creditor
as if directly obtained from such Subordinated Creditor.  Other than
upon the

     


    
      
         


      

      
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    Automatic
Conversion or Optional Conversion of the Series B-2 Stock, in the event of a
permitted sale, assignment, disposition or other transfer, the Subordinated
Creditors engaging in such sale, assignment, disposition or other transfer,
prior to the consummation of any such action, shall cause the transferee thereof
to execute and deliver to Collateral Agent a joinder to this Agreement, or an
agreement substantially identical to this Agreement and acceptable to the
Collateral Agent, in either case providing for the continued subordination and
forbearance of the Subordinated Indebtedness to the Senior Indebtedness as
provided herein and for the continued effectiveness of all of the rights of
Buyers and Collateral Agent arising under this
Agreement.  Notwithstanding the failure to execute or deliver any such
agreement, the subordination effected hereby shall survive any sale, assignment,
disposition or other transfer of all or any portion of the Subordinated
Indebtedness, and the terms of this Agreement shall be binding upon the
successors and assigns of each Subordinated Creditor, as provided in Section 10
below.

     

    2.6           Legends.  Until
the Senior Indebtedness is Paid in Full, each of the Subordinated Indebtedness
Documents at all times shall contain in a conspicuous manner the following
legend:

     

    “Shares
evidenced hereby are subordinate in the manner and to the extent set forth in
that certain Subordination Agreement (the “Subordination Agreement”), dated as
of June 30, 2008, by and among MRU Holdings, a Delaware corporation, Battery
Ventures VII, L.P., a
Delaware limited partnership, Battery Investment Partners
VII, LLC, a
Delaware limited liability company and Viking Asset
Management L.L.C, to the Senior Indebtedness (as defined in the Subordination
Agreement); and each holder of Shares, by its acceptance hereof, shall be bound
by the provisions of the Subordination Agreement.”

     

    2.7           Restriction
on Action by Subordinated Creditors.

     

    (a)           Until
the Senior Indebtedness is Paid in Full and notwithstanding anything contained
in the Subordinated Indebtedness Documents, the Purchase Agreement, the other
Loan Documents or the Permitted Refinancing Loan Documents to the contrary, no
Subordinated Creditor shall, without the prior written consent of Collateral
Agent, agree to any amendment, modification or supplement to the Subordinated
Indebtedness Documents, the effect of which is to (i) increase the aggregate
amount of Subordinated Indebtedness other than through the accrual of dividends
in accordance with the COD as in effect on the date hereof, the number of shares
of Series B-2 Stock beyond the number authorized in the COD or rate of dividends
(or cash pay rate of dividends) on any of the Subordinated Indebtedness, (ii)
shorten the dates upon which redemption or the payment of dividends may be made,
(iii) change in a manner adverse to the Company or add any event of default or
add or make more restrictive any covenant with respect to the Subordinated
Indebtedness, (iv) change the redemption, prepayment or put provisions of the
Subordinated Indebtedness, (v) alter the subordination provisions with respect
to the Subordinated Indebtedness, including,

     


    
      
         


      

      
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    without
limitation, subordinating the Subordinated Indebtedness to any other debt, (vi)
shorten the period prior to redemption of any of the Subordinated Indebtedness
or otherwise alter the redemption terms of the Subordinated Indebtedness in a
manner adverse to the Company, (vii) take any liens in any assets of the Company
or any of the Viking Guarantors or any other assets securing the Senior
Indebtedness or (viii) obtain any guaranties or credit support from any Person
or (ix) change or amend any other term of the Subordinated Indebtedness
Documents if such change or amendment would increase the obligations of the
Company or confer additional material rights on any Subordinated Creditor or any
other holder of the Subordinated Indebtedness in a manner adverse to the
Company, Collateral Agent or Buyers.

     

    (b)           Until
the Senior Indebtedness is Paid in Full, no Subordinated Creditor shall, without
the prior written consent of Collateral Agent, take or continue any action, or
exercise any rights, remedies or powers in respect of any of the Series B-2
Stock or any other Subordinated Indebtedness Documents, or exercise or continue
to exercise any other right or remedy at law or in equity that such Subordinated
Creditor might otherwise possess, to collect any amount due and payable in
respect of any Series B-2 Stock or any of the other Subordinated
Indebtedness, including, without limitation, the acceleration of the
Subordinated Indebtedness, the commencement of any action to enforce redemption
of the Series B-2 Stock or payment or foreclosure on any lien or security
interest, the filing of any petition in bankruptcy or the taking advantage of
any other insolvency law of any jurisdiction (any of the foregoing, an “Enforcement
Action”).  If any Subordinated Creditor shall attempt to take
any Enforcement Action or otherwise seek to collect or realize upon any of the
Subordinated Indebtedness in violation of the terms hereof, the holders of the
Senior Indebtedness may, by virtue of the terms hereof, restrain any such
Enforcement Action or other action, either in its own name or in the name of the
Company.

     

    (c)           Until
the Senior Indebtedness is Paid in Full, any Liens of Subordinated Creditors in
the Collateral which may exist in breach of each Subordinated Creditor's
agreement pursuant to subsection 2.7(a)(vii) or Section 18 of this Agreement
shall be and hereby are subordinated for all purposes and in all respects to the
Liens of Collateral Agent and Buyers in the Collateral, regardless of the time,
manner or order of perfection of any such Liens.  In the event that
any Subordinated Creditor obtains any Liens in the Collateral in violation of
subsection 2.7(a)(vii) or Section 18 of this Agreement, Subordinated Creditors
(i) shall (or shall cause their agent) to promptly execute and deliver to
Collateral Agent such termination statements and releases as Collateral Agent
shall request to effect the release of the Liens of such Subordinated Creditor
in such Collateral and (ii) shall be deemed to have authorized Collateral Agent
to file any and all termination statements required by Collateral Agent in
respect of such Liens. In furtherance of the foregoing, each Subordinated
Creditor hereby irrevocably appoints Collateral Agent its attorney-in-fact, with
full authority in the place and stead of such Subordinated Creditor and in the
name of such Subordinated Creditor or otherwise, to execute and deliver any
document or instrument which such Subordinated Creditor may be required to
deliver pursuant to this subsection 2.7(c).

     


    
      
         


      

      
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    3.           Continued Effectiveness of this Agreement;
Modifications to Senior Indebtedness.

     

    (a)           The
terms of this Agreement, the subordination effected hereby, and the rights and
the obligations of Subordinated Creditors, Collateral Agent and Buyers arising
hereunder, shall not be affected, modified or impaired in any manner or to any
extent by: (i) any amendment or modification of or supplement to the Purchase
Agreement, any other Loan Document or any Permitted Refinancing Loan Document or
any Subordinated Indebtedness Document; (ii) the validity or enforceability of
any of such documents; or (iii) any exercise or non-exercise of any right, power
or remedy under or in respect of the Senior Indebtedness or the Subordinated
Indebtedness or any of the instruments or documents referred to in clause (i)
above.

     

    (b)           Collateral
Agent and Buyers may at any time and from time to time in their sole discretion,
renew, amend, refinance, extend or otherwise modify the terms and provisions of
Senior Indebtedness (including, without limitation, the terms and provisions
relating to the principal amount outstanding thereunder, the rate of interest
thereof, the payment terms thereof and the provisions thereof regarding default
or any other matter) or exercise (or refrain from exercising) any of their
rights under the Loan Documents, all without notice to or consent from any
Subordinated Creditor and without incurring liability to such Subordinated
Creditor and without impairing or releasing the obligations of any Subordinated
Creditor under this Agreement.  No compromise, alteration, amendment,
renewal, restatement, refinancing or other change of, or waiver, consent or
other action in respect of any liability or obligation under or in respect of,
any terms, covenants or conditions of Senior Indebtedness or the Loan Documents,
whether or not in accordance with the provisions of the Senior Indebtedness,
shall in any way alter or affect any of the subordination provisions
hereof.

     

    4.           Representations
and Warranties.

     

    Each
Subordinated Creditor hereby represents and warrants (as to itself and not as to
any other Subordinated Creditor) to Collateral Agent and Buyers as
follows:

     

    4.1           Existence
and Power.  Such Subordinated Creditor is duly organized,
validly existing and in good standing under the laws of the state of its
organization.

     

    4.2           Authority.  Such
Subordinated Creditor has full power and authority to enter into, execute,
deliver and carry out the terms of this Agreement and to incur the obligations
provided for herein, all of which have been duly authorized by all proper and
necessary action and are not prohibited by the organizational documents of such
Subordinated Creditor.

     

    4.3           Binding
Agreements.  This Agreement, when executed and delivered, will
constitute the valid and legally binding obligation of such Subordinated
Creditor enforceable in accordance with its terms.

     

    4.4           Conflicting
Agreements; Litigation.  No provisions of any mortgage,
indenture, contract, agreement, statute, rule, regulation, judgment, decree or
order

     


    
      
         


      

      
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    binding
on such Subordinated Creditor or affecting the property of such Subordinated
Creditor conflicts with, or requires any consent which has not already been
obtained under, or would in any way prevent the execution, delivery or
performance of the terms of this Agreement.  The execution, delivery
and carrying out of the terms of this Agreement will not constitute a default
under, or result in the creation or imposition of, or obligation to create, any
Lien upon the property of such Subordinated Creditor pursuant to the terms of
any such mortgage, indenture, contract or agreement.  No pending or,
to the best of such Subordinated Creditor’s knowledge, threatened, litigation,
arbitration or other proceedings if adversely determined would in any way
prevent the performance of the terms of this Agreement.

     

    4.5           No
Divestiture.  On the date hereof, the Subordinated Creditor
which is signatory hereto is the current owner and holder of its Series B-2
Stock and all other Subordinated Indebtedness Documents.

     

    4.6           Default
under Subordinated Indebtedness Documents.

     

    (a)           To
the knowledge of such Subordinated Creditor, on the date hereof, no default
exists under or with respect to its Series B-2 Stock or any of the other
Subordinated Indebtedness Documents.

     

    (b)           The
Company hereby represents and warrants to Collateral Agent and Buyers that the
signatories to this Agreement under the heading “Subordinated Creditors”
constitute all of the holders of the Series B-2 Stock and the other Subordinated
Indebtedness.

     

    5.           Cumulative
Rights, No Waivers.  Each and every right, remedy and power
granted to Collateral Agent or Buyers hereunder shall be cumulative and in
addition to any other right, remedy or power specifically granted herein, in the
Purchase Agreement, the other Loan Documents or Permitted Refinancing Loan
Documents or now or hereafter existing in equity, at law, by virtue of statute
or otherwise, and may be exercised by Collateral Agent or Buyers, from time to
time, concurrently or independently and as often and in such order as Collateral
Agent or Buyers may deem expedient.  Any failure or delay on the part
of Collateral Agent or Buyers in exercising any such right, remedy or power, or
abandonment or discontinuance of steps to enforce the same, shall not operate as
a waiver thereof or affect Collateral Agent’s or Buyers’ right thereafter to
exercise the same, and any single or partial exercise of any such right, remedy
or power shall not preclude any other or further exercise thereof or the
exercise of any other right, remedy or power, and no such failure, delay,
abandonment or single or partial exercise of Collateral Agent’s or Buyers’
rights hereunder shall be deemed to establish a custom or course of dealing or
performance among the parties hereto.

     

    6.           Modification.  Any
modification or waiver of any provision of this Agreement, or any consent to any
departure by Collateral Agent or any Subordinated Creditor therefrom, shall not
be effective in any event unless the same is in writing and signed by Collateral
Agent and the holders of at least 51% of the then issued and outstanding shares
of Series B-2 Stock, and then such modification, waiver or consent shall be
effective only in the specific instance and for the specific instance and for
the specific purpose given.  Any notice to or demand on
any

     


    
      
         


      

      
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    Subordinated
Creditor in any event not specifically required of Collateral Agent hereunder
shall not entitle any Subordinated Creditor to any other or further notice or
demand in the same, similar or other circumstances unless specifically required
hereunder.

     

    7.           Additional
Documents and Actions.  Each Subordinated Creditor at any time,
and from time to time, after the execution and delivery of this Agreement, upon
the request of Collateral Agent and at the expense of Company, promptly will
execute and deliver such further documents and do such further acts and things
as Collateral Agent may request in order to effect fully the purposes of this
Agreement.

     

    8.           Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same.  The addresses and facsimile numbers for such
communications shall be:

     

    


     

    
      	
              If
      to a Subordinated    

              Creditor:

            	
              Battery
      Partners VII, LLC

              930
      Winter Street, Suite 2500

              Waltham,
      Massachusetts 02451

              Attention:
      Michael Brown

              Telecopy:  (781)
      478-6601

            
	 	 
	
              With
      a copy to:

            	
              Nixon
      Peabody LLP

              100
      Summer Street

              Boston,
      Massachusetts 02110

              Attention:
      Christopher Keefe, Esq.

              Telecopy:
      (866) 947-1550

            
	 	 
	
              If
      to the Company:    

            	
              MRU
      Holdings, Inc.

              590
      Madison Avenue, 13th
      Floor

              New
      York, NY 10022

              Attention:
      Yariv Katz, Esq.

              Telecopy:  (866)
      896- 1055

            
	 	 
	
              With
      a copy to:

            	
              Paul,
      Hastings, Janofsky & Walker LLP

              75
      East 55th Street

              New
      York, NY 10022

              Attention:
      Michael L. Zuppone, Esq.

              Telecopy:
      (212) 318-6906

            


    

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              If
      to Collateral Agent:    

            	
              Viking
      Asset Management L.L.C.

              600
      Montgomery Street, 44th Floor

              San
      Francisco, CA  94111

              Attention:  Michael
      Rudolph

              Telecopy:  (415)
      981-5301

            
	 	 
	
              with
      a copy to:

            	
              Viking
      Asset Management, LLC

              10
      Glenville Street, 3rd Floor

              Greenwich,
      Connecticut 06831

              Attention:  Robert
      J. Brantman

              Facsimile:
      (646) 840-4958

            
	 	 
	
              with
      a copy to:

            	
              Katten
      Muchin Rosenman LLP

              525
      West Monroe Street

              Chicago,
      Illinois 60661-3693

              Attn:
      Mark Wood, Esq.

              Telecopy:
      (312) 577-8858

            


    

     

    or, in
the case of party named above, at such other address and/or facsimile number
and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change.  Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or deposit with a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

     

    9.           Severability.  In
the event that any provision of this Agreement is deemed to be invalid by reason
of the operation of any law or by reason of the interpretation placed thereon by
any court or governmental authority, this Agreement shall be construed as not
containing such provision and the invalidity of such provision shall not affect
the validity of any other provisions hereof, and any and all other provisions
hereof which otherwise are lawful and valid shall remain in full force and
effect.

     

    10.         Successors
and Assigns.  This Agreement shall inure to the benefit of the
successors and assigns of Collateral Agent and Buyers and shall be binding upon
the successors and assigns of the Subordinated Creditors and the
Company.

     

    11.         Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to each other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.

     

    12.         Defines Rights of Creditors;
Subrogation.

     


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    (a)           The
provisions of this Agreement are solely for the purpose of defining the relative
rights of Subordinated Creditors, Collateral Agent and Buyers and shall not be
deemed to (i) create any rights or priorities in favor of any other Person,
including, without limitation, the Company or any Viking Guarantor, or (ii)
amend any of the Loan Documents or in any way waive any of the rights that the
Collateral Agent and the Buyers have against the Company or any Viking Guarantor
under the Loan Documents.

     

    (b)           Subject
to the Payment in Full of the Senior Indebtedness, in the event and to the
extent cash, property or securities otherwise payable or deliverable to the
holders of the Subordinated Indebtedness shall have been applied pursuant to
this Agreement to the payment of Senior Indebtedness, then and in each such
event, the holders of the Subordinated Indebtedness shall be subrogated to the
rights of each holder of Senior Indebtedness to receive any further payment or
distribution in respect of or applicable to the Senior Indebtedness; and, for
the purposes of such subrogation, no payment or distribution to the holders of
Senior Indebtedness of any cash, property or securities to which any holder of
Subordinated Indebtedness would be entitled except for the provisions of this
Agreement shall, and no payment over pursuant to the provisions of this
Agreement to the holders of Senior Indebtedness by the holders of the
Subordinated Indebtedness shall, as between the Company or any Viking Guarantor,
its creditors other than the holders of Senior Indebtedness and the holders of
Subordinated Indebtedness, be deemed to be a payment by the Company or any
Viking Guarantor to or on account of Senior Indebtedness.

     

    13.         Conflict.  In
the event of any conflict between any term, covenant or condition of this
Agreement and any term, covenant or condition of any of the Subordinated
Indebtedness Documents, the provisions of this Agreement shall control and
govern.  For purposes of this Section 13, to the extent that any
provisions of any of the Subordinated Indebtedness Documents provide rights,
remedies and benefits to Collateral Agent or Buyers that exceed the rights,
remedies and benefits provided to Collateral Agent or Buyers under this
Agreement, such provisions of the applicable Subordinated Indebtedness Documents
shall be deemed to supplement (and not to conflict with) the provisions
hereof.

     

    14.         Statement
of Indebtedness to Subordinated Creditors.  Company will
furnish to Collateral Agent upon demand, a statement of the indebtedness owing
from the Company to Subordinated Creditors, and will give Collateral Agent
access to the books of the Company in accordance with the Purchase Agreement so
that Collateral Agent can make a full examination of the status of such
indebtedness.

     

    15.         Headings.  The
paragraph headings used in this Agreement are for convenience only and shall not
affect the interpretation of any of the provisions hereof.

     

    16.         Termination.  This
Agreement shall terminate upon the Payment in Full of the Senior
Indebtedness.

     

    
      17.         Subordinated
Default Notice.  Company shall provide Collateral Agent with a
Subordinated Default Notice upon the occurrence of each Subordinated Default,
and

    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Subordinated
Creditors shall notify Collateral Agent in the event such Subordinated Default
is cured or waived.

     

    18.         No
Contest of Senior Indebtedness or Liens; No Security for Subordinated
Indebtedness.  Each Subordinated Creditor agrees that it will
not, and will not encourage any other Person to, at any time, contest the
validity, perfection, priority or enforceability of the Senior Indebtedness or
Liens in the Collateral granted to Collateral Agent pursuant to the Purchase
Agreement, the other Loan Documents or the Permitted Refinancing Loan Documents
or accept or take any collateral security for the Subordinated
Indebtedness.  In furtherance of the foregoing, on the date hereof,
each Subordinated Creditor hereby represents and warrants that it has not taken
or received a security interest in, or lien upon, any asset of the Company or
any Viking Guarantor, whether in respect of the Subordinated Indebtedness or
otherwise.

     

    19.         Governing
Law, Jurisdiction Waiver of Jury Trial.  All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

     

    20.         Waiver of
Consolidation.  Each Subordinated Creditor acknowledges and
agrees that (i) the Company and each Viking Guarantor are each separate and
distinct entities; and (ii) it will not at any time insist upon, plead or seek
advantage of any substantive consolidation, piercing the corporate veil or any
other order or judgment that causes an effective combination of the assets and
liabilities of the Company and any Viking Guarantor in any case or proceeding
under Title 11 of the United States Code or other similar
proceeding.

     

    [Remainder
of Page Intentionally Left Blank; Signature Page to Follow]

     


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, each
Subordinated Creditor, the Company, Collateral Agent and Buyers has caused this
Agreement to be executed as of the date first above written.

     

    
    

     

    
      	 	SUBORDINATED
      CREDITORS:
	 	 
	 	BATTERY VENTURES VII,
      L.P., a Delaware limited
	 	partnership
	 	By: BATTERY
      PARTNERS
      VII, LLC, a Delaware limited
	 	liability
      company
	 	Its: General
      Partner
	 	 
	 	 
	 	By: /s/ Thomas J.
      Crotty                                                      
      	 
	 	Name: 	Thomas J.
      Crotty	 
	 	Title:	Member-Manager	 


    

     

     

    
      	 	BATTERY INVESTMENT PARTNERS
      VII, LLC, a
	 	Delaware limited
      liability company
	 	By: BATTERY
      PARTNERS VII,
      LLC, a Delaware limited
	 	liability
      company
	 	Its:
    Manager
	 	 
	 	 
	 	By: /s/ Thomas J.
      Crotty                                                      
      	 
	 	Name: 	Thomas J.
      Crotty	 
	 	Title:	Member-Manager	 


    

    


     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

        

    
      	 	THE
COMPANY:
	 	 
	 	MRU HOLDINGS, INC., a
      Delaware corporation
	 	 
	 	 
	 	By: /s/ Vishal
      Garg                                                      
      	 
	 	Name: 	Vishal
Garg	 
	 	Title:	Co-President	 




     


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

     

    
      	 	COLLATERAL
    AGENT:
	 	 
	 	VIKING ASSET MANAGEMENT
      L.L.C. in its capacity
	 	as collateral agent
      for Buyers
	 	 
	 	 
	 	By: /s/ S. Michael
      Rudolph                                                      
      	 
	 	Name: 	S. Michael
      Rudolph	 
	 	Title:	Chief Financial
      Officer	 


    

     

     

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

     

    
      	 	BUYERS:
	 	 
	 	LONGVIEW MARQUIS MASTER FUND,
      L.P., a
	 	British Virgin
      Islands limited partnership
	 	By:  Viking
      Asset Management, LLC
	 	Its:   Investment
      Manager
	 	 
	 	 
	 	By: /s/ S. Michael
      Rudolph                                                      
      	 
	 	Name: 	S. Michael
      Rudolph	 
	 	Title:	Chief Financial
      Officer	 


    

     

    
 


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
A

     

    CERTIFICATE
OF DESIGNATION OF SERIES B-2 STOCK